rethink sustainability

The CLIC® Chronicles: The tree of life: powering the circular bioeconomy

There are more than 3 trillion trees on Earth. From the wizened oaks of Wistman’s Wood, an ancient forest in the United Kingdom, where full-grown oaks barely reach above 5 metres, to the 100-metre-tall giant redwoods of California’s state parks, all play a role in providing essential ecological services – sequestering carbon, giving a home to a vast diversity of life, filtering water, and feeding and giving stability to the soil in which they stand. The Amazon, the world’s largest rainforest, even influences rainfall patterns thousands of miles beyond its borders.


Introducing the CLIC® Shapers – watch our video with Marc Palahi, Director of the European Forest Institute and chair of the Circular Bioeconomy Alliance, who believes forests are “the backbone for life on our planet," and the key to creating a new, sustainable economy “powered by nature."

For thousands of years, long-standing trees – the longest-living variety, the Great Basin bristlecone pine, can live for up to 5,000 years – have served as geographical landmarks, provided a sense of continuity for the communities that live near them, and even become a focal point for religious belief and shamanic legends.

Some of these legends tell of trees talking. As with many myths, science is now discovering the kernel of truth – trees do, indeed, communicate with each other. Through enormous underground fungal networks that stretch across entire forests, trees share water, nutrients, and pass on warnings of drought or disease. The mother tree, often the largest and oldest in a forest, acts as the central hub for these networks, bestowing on her offspring the fungal “infections” they need to ward off pests, and even fighting off invasive trees to ensure the security of her tribe.

There is much we are still to learn about trees. According to Marc Palahi, the Director of the European Forest Institute, the future of life on Earth could depend on them. Covering 31% of all land, “forests,” he says, “are an essential biological infrastructure,” “the backbone for life on our planet,” and the key to creating a new, sustainable, circular economy “powered by nature.”

Building this new bioeconomy has become Marc Palahi’s life’s work. In addition to his role with the European Forest Institute, he is chair of the Circular Bioeconomy Alliance, which was established in 2020 by His Majesty King Charles III to drive the transition to an economic model where “life, and not consumption, is the true engine.”

Here, Palahi explains why he believes shifting to a circular bioeconomy is essential if we are to pass on a healthy planet to future generations, and how trees may hold the key to success.

 

Living Labs

“When we established the Circular Bioeconomy Alliance (CBA),” Marc Palahi began, “it was a rather abstract concept. We developed Living Labs to demonstrate how this new economy will work in symbiosis with nature and local communities.”

One such Living Lab is the indigenous-led Amazon Sacred Headwaters Initiative of the Ecuadorian and Peruvian Amazon. Covering an area measuring 35 million hectares, and home to 600,000 people from more than 30 indigenous communities, the project aims to accelerate rainforest restoration while creating new forest-based value chains around cocoa, vanilla, medicinal plants and eco-tourism. By creating economic value in forest preservation and its sustainable management, the CBA’s Living Labs change the incentive structure that too often leads to land degradation, logging and forest clearance. 

We need to learn from indigenous communities how to translate our science into generating wiser decisions, into a wiser humanity

The Amazon Sacred Headwaters Initiative will combine modern innovation with ancient wisdom. “I was lucky enough to live with indigenous communities in the middle of the Amazon for several weeks,” Palahi explained. “I learned a lot from their knowledge on nature. And I was impressed by their ability to translate that knowledge into wisdom, into respect for nature and the environment, even in today’s modern world. We need to learn from indigenous communities how to translate our science into generating wiser decisions, into a wiser humanity, because so far we are only translating science into technology – technology we use to fix problems that we are creating ourselves.”

 

Natural solutions

Today, industry is responsible for around 30% of annual greenhouse gas emissions1, Marc Palahi noted, most arising from the production of bulk materials such as cement, petrochemicals and iron and steel. Industry is also responsible for vast resource extraction, much of which goes unrecycled and is discarded after first use. 

Many of the solutions needed for the transition will be found in nature, Palahi explained, with trees, in particular, offering a wide range of alternative materials that could cut both resource extraction and GHG emissions. For instance, Spinnova® a cotton-like thread spun from wood in a process that saves more CO2 than it emits. Nanocellulose made from wood pulp, which can be both five times lighter and five times stronger than steel. And cross-laminated timber, which is beginning to be seriously considered as an alternative to steel and concrete for the construction of skyscrapers – a 100-metre-tall “ply-scraper” is due for completion in Winterthur, Switzerland in 2026, while Japanese firm Sumitomo Forestry is planning to build a 350-metre-tall wooden skyscraper to mark its 350th anniversary. 

Forests will play an essential role in mitigating climate change, too. Today, the world’s forests absorb 1.5 times more CO2 than the US emits each year. If we are to meet the goals of the Paris climate target it is essential that this carbon sequestration capacity be expanded. The majority of net-zero pathway projections from the Intergovernmental Panel on Climate Change require the restoration of lost and degraded forests on a massive scale.

 

Regenerative Fashion

Marc Palahi is also the lead scientist behind the Regenerative Fashion Manifesto, a commitment by iconic names in the fashion industry, including Brunello Cucinelli, Burberry, Giorgio Armani, Stella Macartney and Selfridges, to shift towards a regenerative model for fashion.

We demonstrate how the need to decarbonise economic sectors like the fashion industry can act as a catalyst to restore degraded landscapes – turning them into regenerative ones, while providing jobs, prosperity and hope

Read also: Fashion's future is in the forest

Here, Palahi explained, the CBA is delivering tangible change through a Living Lab in Chad. Between 1963 and 2001, Lake Chad, the largest lake in Africa’s Chad Basin, shrank by 90%, with water withdrawals for cotton cultivation partly responsible for the loss. In collaboration with LVMH, home to some of the world’s biggest fashion houses, the CBA is promoting sustainable and regenerative methods of cotton production in the region.

The joint project is helping 500 farmers implement regenerative agro-forestry – turning cotton monocultures into diversified ‘forest farms’, with fruit or timber trees planted in and around cotton crops in order to boost soil health and improve water retention, cutting the need for excess water withdrawals and providing alternative, diversified income streams for farmers. A Living Lab in the Himalayas is taking a similar approach, helping to restore degraded land by funding a regenerative approach to farming through connections with major fashion brands.

“The fashion industry is one of the greatest environmental offenders,” Palahi said. “It is responsible for between 4 to 8% of global carbon emissions. [Through Living Labs] we demonstrate how the need to decarbonise economic sectors like the fashion industry can act as a catalyst to restore degraded landscapes – turning them into regenerative ones, while providing jobs, prosperity and hope.”

Read also: Sewing a sustainable fashion industry  

Now is the moment for bankers and banks to be visionaries and lead the change, rather than follow change. We need an economy where life, and not consumption, is the true engine

Visionary finance

Creating sustainable livelihoods for local and indigenous communities will be at the heart of the circular bioeconomy. “The main driver of deforestation is agriculture, because this is profitable in the short-term,” Marc Palahi said. “To avoid deforestation we must emphasise that our forests also have an economic value through the ecosystem services they provide, new materials, new technology and proper sustainable forest management. If we have an economic sector behind our forests we will ensure that forests are taken care of.”

Read also: Cutting out the middleman: the problem with meat

Investment will be needed to scale-up nature-based alternatives to today’s take-make-waste, linear economic model. “Bankers and banks have always played a crucial, transformational role in history. The Renaissance, for instance, would have never happened without visionary bankers like the Medici,” Palahi said. “There have always been visionary bankers who invested in new business models and technologies. Now is the moment for bankers and banks to be visionaries and lead the change, rather than follow change. We need an economy where life, and not consumption, is the true engine.”

We need to redefine our values as a society. Translating science into technology is not enough – we must translate our science into wisdom, the wisdom to restore harmony between humanity and nature

The concept of the ‘tree of life’ appears in many of the world’s oldest and most enduring religious traditions. Our ancestors may not have had carbon sequestration or nanocellulose technologies in mind when they first began telling these stories – but they understood the essential role trees and forests play in nourishing and regulating life on Earth.

Science and technology will provide many of the answers we need to mitigate and adapt to climate change. But, Marc Palahi concluded, if we are to limit global warming, and prevent a catastrophic loss of biodiversity, we must also learn from the indigenous communities on the front-line of protecting the world’s last remaining old-growth forests: “We must decouple the functioning of our economy from our addiction to consumption. We need to value nature as what it is: the true engine of our economy. We need to redefine our values as a society. Translating science into technology is not enough – we must translate our science into wisdom, the wisdom to restore harmony between humanity and nature.”

 

Sector by sector: where do global greenhouse gas emissions come from? - Our World in Data

Important information

This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

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